I got an e-mail from someone about my Open Letter to Jeff Zucker -- some guy from an NBC competitor no less, taking me to task:
Seidman, you're a big help. Like everyone doesn't already know DVD revenue has already reached its peak and is now on the long, hopefully slow, journey towards its ultimate death? Please, we're not stupid. Problem identification is easy, if you want to be useful, how about being solutions oriented?
While I suppose in some ways people who work for networks band together like MLB owners ("what? Steroids? We had no idea!!!!"), I agree with the e-mailers sentiment right down the line. I could say that solutions will cost you $300/hour, but I'd be undercharging and it will only take me about 5 minutes. I'll just go ahead and share it with the masses and pay myself in I told you so dividends. Besides, I am definitely solutions-oriented.
First, let me articulate the problem clearly. DVD revenues are the golden goose. As the e-mailer noted, the gold is still shiny, but the eggs are just a tad bit smaller. DVD sales are down a little, no doubt being eaten into slightly by DVR and On-Demand usage. The exact problem is how to prepare for the future now without killing off the goose that still has many golden eggs to provide.
Odds of my solution being adopted are zero because it would involve going back to Apple. But as the last place network of the big 3, here's what I think NBC should do: give their shows away on Apple, not at $1.99 - but free. Have the same national commercial spots in it that ran on the networks. But do not make it high quality (DVD or better) video as is currently done.
Optimize the free content for the iPhone/iPod. It will look awesome on the iPod or iPhone, it will look OK on a computer screen and it will look not so great on your living room TV -- should you be set up to easily move content from your PC to your TV. And let's face it, right now, relatively speaking that's me and about 5 other people. Yeah, yeah, I know, it's more - but it's not more in a way that really matters right now.
People buying DVDs mostly watch them in their living rooms. But if they buy the DVD and watch it on the computer, the video quality will be much, much higher than what I'm talking about. I'm talking about giving away content that is optimized for the small 2"-3.5" screens. Watchable on your PC, but it won't look as good as what NBC streams itself from its web site. If people want the DVD quality stuff, fine, charge them a buck or two and take the commercials out. Give the lower quality video away with ads for free and test the "portable video" market.
- This would do multiple things for NBC:
- Give them some more buzz for their shows on the internet
- Actually get more viewers for NBC's shows
Get people into the mode of watching video on their iPods and iPhones
It also gives them a chance to work with Apple and perhaps Nielsen and others on measuring the viewership of these shows on these devices. When I watch 20 minutes of something via iTunes and then sync it to my phone it picks up right where I left off on the computer. There's no reason Apple couldn't suck this information back up and use the info in the aggregate. And if you have a problem with this as a privacy concern, fine, don't agree to it -- no free content for you!
Apple should be in the mode of wanting to get more people watching video on these devices and more content (and free content at that) will help. Again, while this content will look like hell on your 50" plasma, it will look fantastic on a 3.5" iPod touch. Here's another benefit for NBC and its advertisers : on the DVR and the PC it's somewhat easy to move past the commercials, on the iPod it's not so easy (at least I have not perfected it yet).